Stalk your Kill before Going after It

In our country, there is lot of good companies, unfortunately, everyone else also knows how good they are and hence, most of the time, their stock prices carry a premium. So what does retail investor like you and I do? Do we pay the premium and cost average our way in? Nope. There is a better way! Equity markets will not always behave in a rational manner. On any given day, the news of the day will drive it up or down – sometimes there is no basis to it. We all know it – it has happened, it is happening, and it will continue to happen. As a long term investors, we always have patience on our side which we can use to our advantage.

Preparing for the Hunt

I haven’t talked to any tiger, but based on National Geographic and Discover Channels, I have noticed that a tiger would never just get up in the morning and go for a kill. Same way you should not attempt to purchase company stock unprepared. Here are few steps. Continue reading rest of this article…

Screening Three More Companies in Agriculture Business

Today is the second part of the screening of companies in agriculture or food related businesses. While there are hundreds of companies out there, as individual investor, it is just not possible to read about each one of them. I am presenting summary of few more that I have read about over last few months. After these two screens, I think I have shortlisted four companies which, for now, is enough to focus on.

Lakshmi Energy and Foods Ltd (LAKSHMIEFL): It is engaged in manufacturing and processing food grains and related products. The product includes rice, basmati rice (branded as Lakshmi Foods), parmal rice, rice bran edible oil, wheat flour, de-oiled cake, refined oils, and cattle feed (branded as Heera Moti). It also as 30MW biomass-based power generation business using rice husk as fuel. The company was formerly known as Lakshmi Overseas Industries Limited and changed its name to Lakshmi Energy and Foods Limited in February 2006. I came to know about this company after reading Supreme Court and agri minister’s tussle over grains rotting in FCI. Continue reading rest of this article…

Screening Four Companies in Agriculture Business

We all want to succeed in investments, but there are very few us who are willing to prepare for this success. Preparing and positioning yourself to take advantage of opportunities is something that is not learnt easily. It takes time and effort. I am not competing for allotment of IPOs and Bonds. Instead I am spending time and effort to continue expand my watch list and my buy list. I would like to be prepared for what I want to buy at next opportunity or when they fall in my fair value range. Following are four companies I screened recently in the agriculture sector.

In general, agricultural business is a low margin business and hence, there is no room for error. In our country, it still continues to be heavily dependent on monsoons. Having said that, I believe a company with good management, combined with buying at decent price, can provide good down side risk for individual investors. Continue reading rest of this article…

Tata Investment Corporation: Can it be Treated like Mutual Fund?

Today, I am responding to generic questions about treating a holding companies like a mutual fund scheme. The point here is, not to say, my approach is the only right way. Right or wrong depends upon the context. It depends upon your objective. So without much ado, here I go….

……holding company having ‘Strategic stake Vs Financial Stake’ and treating(valuing) each of them differently simply because strategic stake may never get sold/realized. Do you factor in this difference in to your fair value calculation ? If yes, how ? The how part of the question is because as per my knowledge there is no such breakup provided in the AR Continue reading rest of this article…

Holding companies Can Be Good Long Term Investments

In writing this post, I am assuming that readers understand what holding companies mean. If not, then you may read a simple primer on holding companies (link to another blog). I do not have any particular bias against or for holding companies. As I have said on many in past, investing should be based on your objectives. These objectives should take into consideration your risk profile and time horizon. This blog is about long term sustainable wealth creation. Does holding companies fit into it? How?

I try to keep things simple and focused. Style and panacea does not give you sustainable returns. Your sustainable returns comes from substance behind those stocks. All holding companies are not created equal, and hence all cannot be  grouped together as good or bad. As an individual investor, you need to separate holding companies that have substance and fits your portfolio objectives. Continue reading rest of this article…

Can I buy Stocks at Current Market Price – at Premium?

The above question can be framed differently as “Do I wait for next Downturn for Cheaper Valuation?”

When you are building your portfolio towards a long term sustainable wealth creation, there are multiple aspects that you need to focus on. As individual investors, it is very easy for us to get carried away with the individual stock wins. But when we look holistically, including wins and losses, then we realize who is the real winner. That’s why I say, for DIY investors, sustainability is key in portfolio management. Over the years, all the retail investors I have interacting with, most of us focus too much on stock picking, or stock selection. This is similar to what an employee does of executing blindly now knowing how it is related to overall company strategy.

The first lesson you should learn in investing is “not stock picking”, but how you can maintain and sustain what you have (safety of capital). By this I do not mean going with bonds, FDs, or government certificates. What I mean is invest in a way, where you believe there is relatively less risk of losing your capital. Continue reading rest of this article…

Three Potential Companies for Long Term Buy

I am still here. I have not left my blog (yet!). Readers have not bugged me enough that I need to run! I can give few excuses for not writing, but the fact is almost one month has passed without a post. Excuses cannot correct that. So let us say, I became lazy for a while.

During this period of laziness, I kept getting questions about my opinion on various companies. I continued my reading browsing, and among the long list, I came across three companies that caught my attention. Following are my thoughts. Before you go through them, please understand that these observations are for my objective (which does not include pump and dump).

AllCargo Global Logistics Limited (ALLCARGO): It is a logistics service provider dealing with multi-modal transport operations, which include less than container load and full container load cargos for exporters and importers. It owns container freight stations near major ports in India. It also has presence in Europe and is expanding in to airfreight business. Continue reading rest of this article…